One concern is that the third-party outfits that often pitch these products might mislead consumers.

Under a settlement with regulators, Capital One Bank will refund about $150 million to 2.5 million customers and also pay $60 million in penalties. Capital One said it believes the average refund will be less than $100.

Consumers are to receive checks if they no longer have Capital One accounts, or credits to their Capital One cards, later this year. Consumers do not need to take action.

Federal regulators charged that Capital One engaged in deceptive marketing tactics to pressure or mislead some consumers into buying payment-protection plans and credit-monitoring services when they activated their credit cards.

Some consumers wrongly believed such products would boost their credit scores.

Name: Susan Tompor

Title: Your Money columnist

What other card issuers are doing:

•Bank of America quit pitching its Credit Protection Plus and Credit Protection Deluxe products in August and no longer offers the plans to new customers. The bank plans to exit that business next year. Existing customers will be given an additional six months of protection free, said Tara Burke, spokeswoman for Bank of America.

•American Express stopped offering its Account Protector program — a debt-cancellation product — earlier this year and will discontinue the plan on Dec. 31.

•Chase said it stopped offering its Chase Payment Protector plans to new enrollments in October 2011 but continues to serve existing customers. Customers can cancel at any time.

•Discover declined to comment but still offered a payment-protection plan.

•Citi Cards recently paused telephone sales for its debt-protection products and said it has reviews already underway, in line with new guidance recently issued by the CFPB. Citi continues to offer its Payment Safeguard program online but it stopped phone marketing of the product.

Ben Woolsey, marketing/consumer research director at CreditCards.com, said one troubling issue with the protection plans involved hard-sell, fear-driven phone pitches that painted a picture of "Hey, you can lose your job." "

Yet, dishing out $10 or more a month for coverage does not mean that your entire credit card bill would be paid.

Typically, a credit-protection service would cover the required minimum monthly payment for a set time, maybe 18 months or two years.

Bank of America's Credit Protection Plus allows a customer to have twice the minimum monthly payment canceled for up to 18 months for various reasons, including involuntary job loss and disability. For "Involuntary Unemployment," customers must qualify for state unemployment benefits, but they would not be eligible if the unemployment was the result of voluntary resignation, termination or retirement. There are additional requirements for students, non-profits and self-employed customers.

Bank of America's Credit Protection Plus allows a person signed up for the service to cancel the minimum monthly payment for up to 18 months for various reasons, including involuntary job loss and disability.

But why couldn't a consumer create his or her own rainy day fund to cover a small expense, such as a minimum payment?

Say the credit card holder signs up for a protection plan that costs $1 per $100 of the outstanding balance each month. That's an extra $20 a month if the credit card balance is typically $2,000 each month. Some plans can charge 59 cents, 89 cents or 94 cents per $100 a month.

"Save that amount each month, instead, and you'll have a small emergency fund to help cover your payments if you lose your job, etc.," said Gerri Detweiler, director of consumer education for Credit.com

Remember, we're talking about covering the minimum payment, not the entire bill, in most cases. Up to $10,000 of the balance would be covered under some plans, such as the American Express plan, if the person enrolled died.

The fine print of such a product could be overwhelming, too. Pay attention, for example, to such things as how much time you have to notify the bank if you lost a job.

The Bank of America product noted that a customer would not be eligible for the "Involuntary Unemployment" benefit if any of the following apply, including if you're a full-time student or work for a non-profit employer. It also did not apply in case of resignation, retirement or if you were terminated from your job because of willful misconduct or criminal misconduct.

Consumers need to take responsibility for their cards — not buy a low-return insurance plan, Woolsey said. "It can give you a false sense of security."

Before you buy, beware

Know what you're getting and how much you're paying for credit card protection plans:

•Read the small print and terms of any credit-protection plan carefully. If you're already jobless or disabled, signing up for a plan now won't pay your bills. You may have a deadline to apply after a major event takes place, too.

•Check your credit card statements each month to see if you may have unknowingly signed up for a credit-protection plan or credit-monitoring service that has a monthly fee.

•If you think the cost is too high, call a card issuer to cancel a credit-protection plan.

•Be sureservices you think are free don't have a hidden monthly fee.

•Take time to understand what exactly would be paid and when you'd be covered. The plans aren't as simple as you might like to believe.

Tompor also writes for the Detroit Free Press

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